Budget calls for tax hike in Chambersburg

CHAMBERSBURG, Pa. - After going 14 years without a real estate tax increase, property owners in Chambersburg are likely to see one for the second year in a row, according to the recommended 2005 budget presented to the borough council Monday.

"Health care, health care, health care," Council President William McLaughlin said in summing up the reason for the proposed 2 mill tax increase. "Last year we got a 24 percent increase and were told we were blessed," he said.

The increase in health-care insurance premiums for 2005 is 18 percent, according to Borough Manager Eric Oyer. That will raise the premiums to more than $1.8 million, he told the council.

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"That 2 mill increase was the equivalent of the health-care increase for the whole borough," Oyer said after the meeting.

The tax increase will generate about $303,000 in new revenues, Oyer said. Even with that, the borough will have to take $480,000 from its cash reserves to match the projected $9.1 million in general fund expenditures, he said.

The overall increase in the general fund budget is 10.9 percent, Oyer said.

Last year, taxes were increased 4.8 mills to 17 mills. One mill is equal to $1 for every $1,000 in assessed value on a property.

Oyer said the average sale price for a house in the area during the first six months on 2004 was approximately $143,000. Based on that figure, he said the 2 mills will add about $40 to the tax bill for the average homeowner.

Even though there has been about $350 million in new construction in Chambersburg since 1990, McLaughlin said revenue growth from real estate taxes has been weak. He said that was due, in part, to successful assessment appeals that have lowered taxes on many properties.

Oyer also recommended the first increase in sanitation fees since 1993. The residential fee for trash collection would go from $8.50 a month to $11.50 a month and commercial customers would see a 45 percent increase, according to the budget.

McLaughlin said the state needs to allow local governments to access other forms of revenue instead of relying so heavily on property taxes.

"People think we're too stupid to handle our own affairs and would rather see us go bankrupt than give us the tools to fix it," he said.

"It appears that we will be facing real estate tax increases for the foreseeable future," Oyer wrote in his budget presentation.

Nonunion workers and members of the American Federation of State, County and Municipal Employees union would receive 3 percent increases in wages and salaries. Unionized police and fire department members would get a 3.5 percent increase next year.

The police department has the largest budget at $3.3 million, a 15 percent increase, Oyer said. The fire, ambulance and fire code departments are budgeted at approximately $2.3 million, an 8.3 percent increase.

The highway, traffic and street lighting departments are budgeted at $1.4 million, a 17.8 percent increase, according to Oyer. The sale of the former Chambersburg Municipal Airport, however, will allow for a 50 percent increase in spending on streets and alleys next year, he said.

Total spending next year is estimated at $54.5 million, which includes the budgets for the water, gas, sewer, electric and sanitation departments, Oyer said.

Final approval of the budget is scheduled for Monday, Dec. 13, he said.